Musk cites whistleblower claims in bid to nix $44-B Twitter deal

Musk’s legal team originally filed a notice with the US Securities and Exchange Commission (SEC) back in July to terminate the takeover contract, alleging that Twitter did not comply with its contractual obligations. (File photo: Daniel Oberhaus/Flickr, CC BY 2.0)

HOUSTON, Texas – The sparring between Elon Musk and Twitter continued Tuesday, as Musk’s attorneys filed another notice to terminate the Tesla CEO’s USD44 billion takeover deal of the social media giant, citing recent bombshell whistleblower claims against it.

Twitter’s former security chief Peiter Zatko filed the whistleblower complaint in July, alleging cybersecurity negligence and mismanagement at the company regarding privacy concerns, misrepresented user data, and the number of spam bots on the platform.

Musk’s legal team originally filed a notice with the US Securities and Exchange Commission (SEC) back in July to terminate the takeover contract, alleging that Twitter did not comply with its contractual obligations.

They added Zatko’s whistleblower claims to the latest SEC filing in order to nix the deal.

“Allegations regarding certain facts, known to Twitter prior to and as of July 8, 2022, but undisclosed to the Musk Parties prior to and at that time, have since come to light that provides additional and distinct bases to terminate the Merger Agreement,” said Musk’s attorney Mike Ringler in a letter to Twitter’s legal chief.

The letter continued that the Zatko complaint “alleges far-reaching misconduct at Twitter—all of which was disclosed to Twitter’s directors and senior executives, including (CEO) Parag Agrawal,” and “that is likely to have severe consequences for Twitter’s business.”

“These allegations, if true, demonstrate that Twitter has breached the following provisions of the Merger Agreement, thereby giving the Musk Parties the right to terminate the Merger Agreement pursuant to its terms,” added Ringler.

Twitter fired back, saying Musk’s termination case is “invalid and wrongful” under the acquisition agreement.

“It is based solely on statements made by a third party that, as Twitter has previously stated, are riddled with inconsistencies and inaccuracies and lack important context,” said Twitter’s attorney William Savitt in a response letter.

“Contrary to the assertions in your letter, Twitter has breached none of its representations or obligations under the Agreement, and Twitter has not suffered and is not likely to suffer a Company Material Adverse Effect,” Savitt’s letter continued.

Twitter said it intends to enforce the acquisition agreement and “close the transaction on the price and terms agreed upon” with Musk.

Musk originally agreed to buy Twitter in April for USD54.20 per share.

Twitter’s share price dropped 1.8 percent on Tuesday to close at USD39.30. (Anadolu)